Photo: Andrew Penner / Istock
By Dan Shapley
Some analysts believe the world is at or near hitting peak oil -- the point at which so much oil has been pumped that demand begins to outstrip supply, leaving a yawning and persistent gap.
In a nutshell, here's why hitting peak oil is a concern:
- Taking Your Lumps At The Pump: If crude is more expensive to extract, and the supply tight, the price to fill your tank goes up. Economics 101.
- Spawning A Tsunami In The Economy: Oil accounts for one third of the energy consumed in the world, and it is the base of the U.S. economic web. It's the fertilizer that grows the food, the plastic in the packaging, the chemicals in the products, and of course the fuel to get it all from here to there. As the price of oil goes up, so goes the price of just about everything else.
- Causing Geopolitical Upheaval: Alternatives to oil aren't ready to take its place, at least not yet. The Department of Energy estimates that the U.S. is ready to produce just 4% of demand from alternatives by 2015, and about 34% by 2025. In the meantime, besides worldwide recession, as the U.S. Government Accountability Office warned, nations would have sudden and new incentives to make war over the remaining reserves.
There are ways to prepare for the inevitable peak.
- Go Green: Transportation accounts for two thirds of the U.S. consumption of oil, so increasing vehicle efficiency and developing viable alternative fuels sooner rather than later can help. Buying locally sourced food and products cuts down on the oil needed to transport goods, and choosing bulk and lightly packaged products cuts down on the need for unnecessary plastic.
- Grow Sustainably: Communities can rein in sprawl and focus development around existing villages and cities so that people are less reliant on cars to get to work, school, shopping and recreation.
- Get Creative: Even Congress is talking about making new investments in alternative energy research and development. Besides fuels, chemicals and plastics can, in many cases, be produced with alternative feed stocks, like vegetable oils. One big problem is that there isn't enough land to produce fuel, chemical feedstock and food with any known agricultural product. That's where the creativity comes in.